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Social Stock Exchange (SSE)

By Amigos IAS

Why is it in the news?

  • SEBI (Securities and Exchange Board of India) board has approved flexibility in the framework for Social Stock Exchange (SSE).
  • The aim is to enhance fundraising opportunities for Not-for-Profit Organizations (NPOs) through SSE.

 

Zero Coupon Zero Principal Instruments (ZCZP)

·       ZCZP instruments can be publicly or privately issued by registered NPOs listed on SSE.

·       It serves as a financial instrument similar to bonds but does not carry any principal or interest.

 

More about the news

  • Changes in Minimum Issue Size for ZCZP: Reduction in the minimum issue size for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by NPOs on SSE from Rs 1 crore to Rs 50 lakh.
  • Changes in Minimum Application Size for ZCZP: Reduction in the minimum application size for public issuance of ZCZP by NPOs on SSE from Rs. 2 lakhs to Rs. 10,000.
  • SSE provides a platform for social enterprises, including NPOs and For-Profit Social Enterprises, to raise funds through the stock exchange mechanism.
  • When a donor contributes to a firm listed on SSE, the firm issues a ZCZP instrument to the donor.
  • Social enterprises seeking listing on SSE must engage in social activities aligned with SEBI guidelines.
  • Activities include eradicating hunger, poverty, malnutrition, promoting healthcare, supporting education, gender equality, empowerment of women, and LGBTQIA communities.

 

Benefits of SSE

  • Brings together social enterprises and donors on a common platform.
  • Facilitates funding and growth of social enterprises.
  • Establishes mechanisms for robust standards of social impact and financial reporting.
  • Ensures transparency in fund mobilization and utilization.

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